Rising temperatures could widen the gap between the Europe's rich and poor nations, an EU agency warned Wednesday, as it announced the warmest decade on record in the continent.

The warning came in the latest report from the European Environment Agency (EEA).

The divide between Europe's rich and poor nations could deepen as poorer countries in the south were hit by spiralling costs for natural disasters such as floodings, storms, and extreme heat waves, it said.

Existing socio-economic gaps between countries could widen because poorer countries had more limited resources to cope with and adapt to the effects of climate change, it said.

"When impacts of climate change affect regions with low adaptive capacity, the consequences can be severe," the report said.

"An integrated assessment of European regions' vulnerability to climate change suggests that (it) may negatively affect the territorial cohesion."

The EAA reported an overall rise in temperature across the continent.

"The average temperature over land in Europe in the last decade was 1.3 degrees Celsius (2.3 degrees Fahrenheit) warmer than in the pre-industrial level, which makes it the warmest period on record," it said.

In the same period, rainfall increased in northern and northwestern Europe, while decreasing in the south, which has been plagued by heat waves and forest fires.

Greenland's ice sheet has been melting at an accelerating pace, and "exceptional melting" took place in the summer of 2012, the report found.

The extent and volume of Arctic sea ice had also been decreasing much faster than previously thought, it said.

The agency predicted that the economic challenges posed by climate change would vary significantly across the continent.

Southern countries will face rising energy costs and heat waves, while western Europe will have to combat coastal flooding, as well as extreme heat spells.

In the northern and eastern parts of the continent, river and (in the north) coastal floods will be the most costly consequences for governments as temperatures rise, it said.

The EEA said damage costs could be significantly reduced by implementing global and European policies in line with a UN-backed pledge to limit global warming to two degrees Celsius.

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